After three years, the long-awaited financial sequel to the general distance selling directive is near finalisation.
Topic: Financial services
Who: The EU Internal Market Council
Where: Brussels
When: October 2001
What happened:
The proposed EU directive governing the distance selling of financial services made a significant stride towards finalisation when the Commission’s Internal Market Council agreed the terms of a Directive to go before the European Parliament. The present plan is for sign-off by the end of 2001, with implementation across the European Union by 30 June 2002.
In relation to e-mail marketing of financial services to consumers, the proposal is that individual states should be free to decide on “opt-in” (prior consent required) or “opt-out”(OK to send the message unless the consumer has not expressed his “manifest objection.”) The same will apply to “manual” telesales, but for telesales using automated calling machines and marketing faxes it is “opt-in”.
There are also comprehensive disclosure requirements and a “cooling off” period. These are similar to those in the general Distance Selling Directive (“DSD”), except that the minimum period within which the consumer will have the right to cancel is not 7 days, but 30 days in the case of life insurance and pension plans and 14 days in the case of other financial services.
Also unlike the DSD, provisions in this draft Directive expressly oblige a consumer who exercises the cancellation right to make payments to the seller. These will be due if the consumer has effectively received some element of the financial service before cancellation. The level of the payment will be equivalent to the value received until cancellation, but “may not be such as it could be construed as a penalty.” Good fodder here for litigation we suspect!
Other rules exclude certain categories of financial service from the full effects of the Directive, but on finalisation of the legislation marketinglaw will give the full details.
Why this matters:
Getting this directive finalised has taken far too long. With the UK’s own Financial Services and Markets Act due shortly to overhaul the regulatory system here for financial promotions, it is critical that the EU gets its act together to keep in step with member state laws.
